Written by Don Ratzlaff Tuesday, 05 June 2012 12:09
USD 410 Superintendent Steve Noble has become a big fan of trickle-down economics and Gov. Sam Brownback’s “dynamic scoring model” in recent weeks.
It’s not that he argues for the validity of approaches, but that their success may be public K-12 education’s only chance to avoid another round of major budget cuts in the light of the state’s new tax-cut legislation.
“If this doesn’t work, schools and other state agencies are going to be in trouble financially,” Noble said last week.
The bill Brownback signed last month will cut individual income tax rates and exempts 191,000 partnerships, sole proprietorships and other businesses from income taxes.
Trickle-down economics, a concept that gained favor during the Reagan Administration, postulates that cutting the taxes of the prosperous prompts job creation and economic growth for the greater population.
But financial projections produced by the non-partisan Kansas Legislative Research Department show the new tax cuts will start producing a revenue shortfall in July 2014, increasing to an estimated $2.5 billion to $3 billion shortfall in 2018. The current annual state budget is about $6.2 billion in tax funds.
Moderate Republicans and Democrats have said a tax cut of that size will mean Brownback and the Legislature will have to make drastic cuts to schools, social services and public safety.
“The reason schools are so affected by this type of potential harm is that about 50 percent of the state’s general fund is spent on public education, preK-12,” he said.
“Where are they going to take that shortfall from? They can’t nickel and dime all the other little pieces of the pie to death. They’re going to have to cut from the largest piece of the pie, too.”
Unhappy with KLRD’s projections of budget shortfalls caused by the proposed tax cut, the governor’s administration has prepared rosier numbers through its “dynamic scoring model” that shows the positive effect of tax cuts cycling back through the economy.
Noble said he hopes the governor’s model is correct.
“Seriously, we better pray dynamic scoring is the new revelation,” he said. “Because if it’s not, public education is going to be in a deep, deep hole.”
Noble said he favors a moderate tax reduction.
“Wouldn’t we all love to pay less taxes, me included,” he said. “But the majority of people I talk to in Marion County and USD 410 are more concerned about property taxes than we are about income taxes.
“I can see the benefit for small business owners in Marion County,” Noble said about the bill. “I can see specifically why the governor’s plan could even help business start-up in?Marion County.
“I?think that’s admirable. We should try to have things in place to help businesses in our community and our county. But to what extent are we willing to do that?”
Even if the governor’s projections are accurate, tax cuts for public education are still inevitable, Noble said.
“If dynamic scoring proposals work, even to the governor’s best estimate, by his own admission he has said we will have to trim the cost of government,” Noble said. “That means cuts to schools.”
Because of current reserves in the state budget, schools could see some reprieve from cuts for a few years. Noble said it’s frustrating to face the likelihood of more cuts when the state’s economy is finally improving.
“We’ve been told repeatedly in public education that when times are tough, we need to tighten our belts,” he said. “We have stood by and said we will tighten our belts—and we’ve done that. We’ve cut funding to classrooms, plain and simple.
“Now there’s money—the state’s economy is growing, even with our current tax structure. Now we’re going to give away that revenue in the form of a tax cut.”
USD 410 will get a boost of $60 in the basic state aid to pupil this coming year, thanks to the governor’s initiative. But the prospect of replenishing the $200 per student cut over the past several years is unlikely.
“The restoring of funding now becomes a pipe dream unless this thing gets fixed,” Noble said.